Blue Nile Inc. Earnings: Revenue Falls After Four Straight Quarters of Rising, Net Income Declines

Blue Nile Inc. (NASDAQ:NILE) reported its results for the fourth quarter. Blue Nile is an online retailer of high quality diamonds and fine jewelry in the United States.

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Blue Nile Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Blue Nile Inc. fell to $4.2 million (30 cents per share) vs. $6.2 million (41 cents per share) a year earlier. This is a decline of 31.7% from the year earlier quarter.

Revenue: Fell 2.1% to $112.3 million from the year earlier quarter.

Actual vs. Wall St. Expectations: Blue Nile Inc. fell short of the mean analyst estimate of 42 cents per share. It fell short of the average revenue estimate of $123.2 million.

Quoting Management: “The fourth quarter was challenging for Blue Nile, with weakness in demand from our high end diamond customers and some of our international markets, as well as the continued impact of inflationary pressure on commodity costs. While we managed the business through these headwinds, we implemented components of a new strategy designed to accelerate growth. This plan centers around the acquisition of non-engagement customers, which we believe in the long term will feed growth in our engagement and non-engagement businesses. This strategy drove positive momentum, resulting in our strongest period of customer acquisition since 2007, with new customer growth of 15%. Additionally, in the fourth quarter we achieved order growth of 22% and unit growth of 30% compared to the fourth quarter of 2010. Growth in all three of these metrics accelerated in December and we believe these trends are important indicators of the long term growth potential of our business,” said Vijay Talwar, Chief Executive Officer.

Key Stats:

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the fourth quarter of the last fiscal year, which saw revenue rise 11.5%.

The company has now seen net income fall in each of the last two quarters. In the third quarter, net income fell 32.6% from the year earlier quarter.

The company has now fallen short of analyst estimates for the last three quarters. It missed the mark by 5 cents in the third quarter and by 3 cents in the second quarter.

Looking Forward: The average estimate for the first quarter of the next fiscal year remains unchanged at 18 cents a share. The average estimate for the fiscal year has seen a bump from 89 cents per share sixty days ago to 91 cents.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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